Ford to invest $1.2 billion in Michigan plants

Ford announced $1.2 billion in new investments in Michigan at plants in Flat Rock, Romeo and Wayne
Wochit

Ford said Tuesday it will invest $1.2 billion in Michigan at three locations, including $850 million at its Michigan Assembly plant in Wayne to make the new Ford Ranger and Ford Bronco, as the U.S. market continues to shift from a car market to a truck and SUV market.

The automaker's decision prompted President Donald Trump to tweet about the investment plans, saying car companies are coming back to the U.S. — even though Ford executives said the plant investments were planned long before Trump took office.

Big announcement by Ford today. Major investment to be made in three Michigan plants. Car companies coming back to U.S. JOBS! JOBS! JOBS!

The Dearborn automaker's $1.2-billion investment also includes plans to add 130 jobs at its engine plant in Romeo, where it will spend $150 million to expand capacity so it can make engine components for the Ranger and Bronco. In addition, Ford said it will spend $200 million to build a new advanced data center adjacent to its assembly plant in Flat Rock.

"These Michigan Assembly Plant and Romeo Engine plant announcements are consistent with what we agreed to and talked about with the UAW in 2015 negotiations," said Joe Hinrichs, Ford's president of the Americas.

Ford had confirmed its plans to build the Ranger and Bronco at Michigan Assembly in January at the Detroit auto show after more than two years of unconfirmed media reports.

U.S. Rep. Debbie Dingell, D-Dearborn, applauded the investments.

"Ford’s roots run deep in Michigan’s 12th District, and these investments bolster the company’s dedication to building its highest-tech vehicles here in the U.S. and strengthen its commitment to American workers," Dingell said. "Ford’s announcement of a new advanced data center at the Flat Rock Assembly Plant also further positions the company as a leader in the future of mobility, including the development of connected and automated vehicles."

Ford Executive Vice President and President of the Americas for Ford Motor Company Joe Hinrichs announces plans for a 2020 Bronco at the North American International Auto show, Monday, Jan. 9, 2017, in Detroit.(Photo: Carlos Osorio, AP)

The Ranger and Bronco will replace the Ford Focus and Ford C-Max at Michigan Assembly after the automaker moves production of the small cars to its plant in Hermosillo, Mexico. There, Ford will essentially retain 4,000 employees who have been building the Focus and C-Max.

The Ranger pickup, which is currently sold globally, will hit U.S. showrooms and have new styling and powertrain options in 2019. Originally a styling choice inside the F-150 line, the Ranger became available as its own compact pickup in the U.S. in 1982 and was sold in the U.S. until 2011.

Ford doesn't sell the Ranger pickup i the U.S. yet, but it will. This Ford Ranger made its European debut at the Frankfurt Motor Show in 2015.(Photo: Ford Motor Company)

Hinrichs said the new Ranger will be based on Ford's global Ranger platform.

"There will be a lot of similarities, but we will have some changes in styling … that will make it unique for North American customers," Hinrichs said.

The Bronco, built on the architecture of a full-size truck starting in the 1960s through the mid-1990s, also will be based on the Ranger platform.

Ford's $850-million investment at Michigan Assembly is $150 million more than the automaker promised to invest during its 2015 contract negotiations with the UAW, and the automaker's $150-million investment in Romeo matches its commitments as part of that four-year contract.

The automaker also is developing a new engine for the Ranger and Bronco, but Hinrichs declined to say where that engine will be built.

Trump has sought credit for Ford's announcements, most of which were already in motion before he took aim at American companies that manufacture goods in foreign markets for sale in the U.S.

"Car companies coming back to U.S.," Trump tweeted Tuesday.

That's not accurate, however. Car companies are continuing to move U.S. small car production to foreign markets while investing in U.S. plants to make trucks and SUVs.

Ford's government affairs team briefed the Trump administration on the investment shortly before 8 a.m., Hinrichs said.

State tax incentives also were a factor in the investment decisions, Hinrichs said.

The board of the Michigan Strategic Fund, which makes decisions about tax incentives for economic development projects, on Tuesday approved an economic development incentive package of just over $30.95 million over 15 years.

The incentives include a $10-million performance-based grant connected to Ford's investment plans at the Flat Rock Assembly Plant and a tax exemption estimated to be worth $10.4 million over 15 years.

The board also approved a $2 million grant connected to its investments at Michigan Assembly and Romeo Engine and 15-year tax exemptions valued at $7.25 million and $1.3 million in the cities of Wayne and Romeo, respectively.

The Michigan Strategic Fund's decision is based on Ford's plans to invest $2.2 billion at plants in Michigan in the coming years.

That investment includes Ford's announcement in January that it would invest $700 million and add 700 jobs at its assembly plant in Flat Rock to build self-driving and electric vehicles along with the Mustang and Lincoln Continental already produced at the plant.

The move was paired with a decision to abandon plans to construct a $1.6-billion new plant in Mexico where Ford had planned to make the Focus. Instead the Focus production will shift to an existing Mexico plant.

“The wide range of projects approved today — including major investments by Ford and community revitalization projects in Detroit, Grand Rapids and Flint — will serve as catalysts for further economic growth and attract new jobs to these areas,” Gov. Rick Snyder said in a statement. “Today’s actions further demonstrate our commitment to Michigan’s future with more jobs and better lives for all Michiganders.”

The data center Ford announced Tuesday will be in a new building on the same campus as the Flat Rock plant. That data center is one of two new data centers Ford is building as part of an overhaul of its office and engineering capabilities in Michigan.

"Both of those centers are part of our needs for the future and will help us handle our capacity to go from where we are going today to ... developing and creating self-driving vehicles and the vehicles of the future, he said.